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Introduction

Mr. Chairman and members of this distinguished Subcommittee, thank you for the

opportunity to be here today.

Today’s personnel overview is much more than a “report card” or a request for new

legislation. I will be addressing the many ways that we are supporting our troops and their

families, and the many issues that confront them. With your continuing support, I know that we

can continue to attract and retain the best and brightest, and sustain the high quality of our all-

volunteer force. Our young men and women and their families deserve the best we can give

them.

In my overview, I will outline the critical steps we have taken to attract and retain talent

in our Armed Forces – including targeted pay raises and numerous quality of life improvements

for the service members and their families. Today, I will discuss a number of initiatives we are

undertaking, such as reducing stress on our forces, rebalancing capabilities in the active and

reserve components, building a foreign language capability, making military families a top

priority, improving DoD healthcare management, to name but a few.

Using authorities and flexibility you have provided us, we have numerous initiatives

underway to improve management of the force, and to increase readiness. With your help last

year, we are now establishing a new National Security Personnel System that should help us

better manage our 746,000 civilian employees. Similarly, we are using the new authorities

granted us last year to preserve military training ranges while keeping our commitment to

responsible stewardship of the environment. Flexible authorities that leverage readiness best

serve our national defense.

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We do face some challenges, such as the growing list of military entitlements that do not

leverage readiness. With your continuing support, however, I am confident we can appropriately

compensate our service members and their families for their sacrifices, yet maintain fiscal

integrity.

End Strength

Reducing stress on our forces is a top priority. Some have called for a permanent

increase in end strength. We do not believe this is wise. We continue to review the adequacy of

our military capabilities to ensure that we meet our nation’s security needs. End strength is a

critical determinant of capability, but only one of many other factors. A permanent increase is

not in the nation’s long-term interest. We have a number of other initiatives underway to

increase our near-term and long-term capabilities while relieving near-term stress on the force.

The Services have begun converting 10,000 military positions to civilian in FY 2004 and

have programmed an additional 10,000 conversions for FY 2005. The military end strength

made available from these conversions will be used by the Army, Air Force, and Marine Corps

to significantly improve long-term military capability and reduce stress on the Active and

Reserve components. The Navy’s military-to-civilian conversions will result in military end

strength reductions and substantial cost savings, thanks in part to fleet modernization.

Moreover, by employing transformational force management practices, the Services can

perhaps achieve the greatest degree of flexibility in utilizing the Total Force, while reducing both

the stress on critical career fields and the need for involuntary mobilization. Force rebalancing,

continuum of service, reach-back operations, rotational overseas presence, and improvements in

the mobilization process can help to ensure that the Services have quick access to individuals

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with the skills and capabilities required for both emergency operations and sustained, day-to-day

activities.

Given the flexibilities the law accords to the Secretary and the military departments,

adequate temporary end strength increases can be pursued as necessary. As you will recall,

Congress amended title 10 in the FY 2003 National Defense Authorization Act to allow the

Secretary to temporarily exceed end strength by 3% instead of the previous 2% authority. Such

temporary authority provides an efficient and timely way to meet service requirements. The

Army is using this flexibility while it continues current operations and reconfigures for future

engagements. We anticipate that the requirement for this end strength “spike” will dissipate as

the Global War on Terrorism military manpower needs abate, the Army transition stabilizes, and

our other initiatives take effect.

The United States can afford whatever military force level is necessary and appropriate to

ensure our national security, but adding permanent military end strength should be the last

choice…not the first. The costs are sizable over the lifetime of each added service member.

Further, it takes time to recruit, train, and integrate new military personnel—the desired results

will not materialize in the short run. Additionally, the funds required for a permanent increase in

military end strength would crowd out funding for the transformational capabilities that are

essential for our future security and offer the best way to reduce stress on both our current and

future forces. Consequently, we should focus our efforts on making better use of our existing

end strength so that we can reduce stress on the force while concomitantly increasing our

capability.

Rebalancing the Force

The Reserve components are making significant and lasting contributions to the nation’s

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defense and to the Global War on Terrorism while the Department of Defense transforms to a

more responsive, lethal, and agile force. However, it has become evident that the balance of

capabilities in the Active and Reserve components is not the best for the future. There is a need

for rebalancing to improve the responsiveness of the force and to help ease stress on units and

individuals with skills in high demand.

Ensuring we have the right balance of our capabilities requires a multifaceted approach

by the Department—no single solution will resolve the challenges faced by the Services. To

achieve this goal, we have engaged in a cohesive rebalancing strategy to achieve the right force

mix. The strategy consists of the following points:

• Move later deploying AC forces forward in operations plans and early deploying RC

forces later in the plan; shift assets among combatant commanders

• Introduce innovative management techniques (such as enhanced volunteerism,

expanded use of reachback, and streamlining the mobilization process to improve

responsiveness)

• Rebalance capabilities by converting lower priority structure to higher priority

structure both within and between the AC and RC

Through a comprehensive rebalancing strategy, we will gain added efficiencies from the

existing force structure that may preclude any necessity to increase force end strength. The

rebalancing strategy has as its objectives: to enhance early responsiveness by structuring forces

to reduce the need for involuntary mobilization during the early stages of a rapid response

operation; to spread mobilizations/deployments across career fields by structuring forces to

achieve reasonable and sustainable rates; and to employ innovative management practices. By

employing innovative force management practices, the Services can perhaps achieve the greatest

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degree of flexibility in utilizing the Total Force, while reducing repeated use in certain career

fields and the need for involuntary mobilization.

Rebalancing efforts will not happen overnight. This process will be iterative and

ongoing, as demands on the Total Force change and new requirements demand different skill

sets. Already, in 2003, the services have rebalanced some 10,000 positions within and between

the active and reserve components. For example, the Army is transforming 18 Army Guard

field artillery batteries into military police. We intend to expand those efforts this year by

rebalancing an additional 20,000 positions and will rebalance another 20,000 in 2005 – for a total

of 50,000 rebalanced positions by the end of next year. Rebalancing is planned for such critical

fields as civil affairs, psychological operations, chemical, special operations forces, intelligence,

and military police. Indeed, we are accelerating the creation of 19 MP provisional units through

conversions.

Active Deployment and Reserve Mobilizations

Since the beginning of the GWOT, approximately 171, 250 active duty members have

been deployed (OEF and OIF). As of December 31, 2003, 1, 423,341 service members were on

active duty.

In the Reserve components, we are in the midst of one of the longest periods of

mobilization in our history. The men and women of the National Guard and Reserve have

responded promptly and are performing their duties, as the Nation requires. As of 31 December

2003, we had mobilized 319,193 Reserve personnel, since the beginning of the GWOT, who are

performing and have performed magnificently throughout the world. We are managing these

call-ups in a prudent and judicious manner, assuring fair and equitable treatment as we continue

to rely on these citizen-soldiers.

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As of 31 December 2003, there were 181,459 mobilized under 10 USC (12302).

• Army National Guard: 91,079

• Army Reserve: 65,079

• Air National Guard: 6,420

• Air Force Reserve: 9,376

• Navy Reserve: 1,562

• Marine Corps Reserve: 6,774

• Coast Guard Reserve: 1,169

Managing Force Capabilities in High Demand Skills

With the Global War on Terrorism and the ongoing mobilization of Guard and Reserve

members, we are monitoring the capabilities in the Reserve components that are in high demand.

We have identified actions necessary to reduce the demand on these capabilities, where

necessary.

About 320,000 RC members have been called to active duty in support for the Global

War on Terrorism since September 11, 2001. To assess the capabilities that are projected to be

in demand as we prosecute the war on terrorism, the Department has conducted an analysis of

what elements of the RC have been called-up—evaluating that usage in terms of:

• Frequency of call-up—the number of times members have been called to active duty

since 1996,

• Percentage of available pool—what percent of the RC force has already been used to

support current operations, and

• Duration—how long the members served when they were called-up.

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Frequency of call-up- To date, a relatively small number of RC members have been

called up in support of the current operation who were called up for other contingency operations

in the last eight years. Less than 12,000 out of the 876,000 members in the Selected Reserve (or

just over 1 percent) have been called up in support of multiple contingencies since 1996.

Another 16,000 (or about 2 percent of the Selected Reserve) have been called up more than once

for the Global War on Terrorism. Overall, the frequency of call-ups does not indicate an

excessively high demand on the Reserve force at this time.

Percent of available pool—Through December 2003, 36 percent of the Selected Reserve

force was mobilized in just over two years of this operation. However, the usage rate is not

consistent across the force. Some career fields—like force protection assets, civil affairs,

intelligence and air crews—have been used at a much higher rate. And other career fields—like

medical administration, legal, and dental care—have been used at a much lower rate. Currently,

the utilization is concentrated in about ¼ of officer career fields and about � of the enlisted

career fields; furthermore, the highest utilization is concentrated in a relatively small number of

selected career fields.

Duration— Tour lengths for RC call-ups have increased for every operation since Desert

Shield/Desert Storm. The average tour length for Desert Shield/Desert Storm was 156 days. For

operations in Bosnia, Kosovo, and SWA, tours were for about 200 days. For those members

who have completed tours of duty during the current contingency, tour lengths have averaged

about 320 days. To mitigate the depletion of the available pool of reserve assets, the Department

policy is to utilize volunteers to the maximum extent possible. Reserve component members

will not serve involuntarily more than 24 cumulative months.

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Continuum of Service

We are in our second year of implementing a new approach in force management called

“continuum of service.” The continuum of service will facilitate varying levels of participation

and enable military personnel to move back and forth between full-time and part-time service.

Particularly for reservists, this approach would make it easier for them to voluntarily move up to

full-time service for a period of time, or into a participation level somewhere between full-time

and the traditional 38 days of reserve training each year. Or it would allow them to move in the

other direction – fewer days of participation as their circumstances dictate. Similarly, an active

service member could move into a Reserve component for a period of time, without jeopardizing

his or her career and eventual opportunity for promotion. Just as the continuum of service model

encourages volunteerism among the standing force, it also creates opportunities for military

retirees and other individuals with specialized skills to serve on a more flexible basis, if their

skills are needed.

The continuum of service model has a number of important advantages: in addition to

capitalizing on volunteerism, it will enhance the ability of the Armed Forces to take advantage of

the high-tech skills many Reservists have developed by virtue of their private sector experience –

while at the same time creating opportunities for those in the Active force to acquire those kinds

of skills and experiences. And it improves our capability to manage the military workforce in a

flexible manner, with options that currently exist only in the private sector. Finally, there are

certain skills that are hard to grow or maintain in the full-time force, but may be ideally suited

for part-time service in a Reserve component, such as certain language skills and information

technology specialties. The continuum of service can provide the opportunity for highly trained

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professionals to serve part-time and provide a readily available pool of these highly specialized

individuals who would be available on an as-needed basis.

There are several areas in which we need your assistance to implement the continuum of

service. They include providing more consistency in management and accounting of reservists

serving on active duty, providing greater flexibility in using inactive duty for reach-back and

virtual duty, allowing for an alternative military service obligation and streamlined basic training

for certain individuals accessed into the force with unique civilian acquired skills, and providing

the authority to establish auxiliaries for the Army, Navy and Marine Corps, modeled after the

very successful Coast Guard Auxiliary. These modest, but significant changes will help the

Department optimize the use of the force and facilitate volunteerism, thus reducing the need to

involuntarily call-up Guard and Reserve members. Legislative proposals to effect these changes

will be forwarded to the Congress for your consideration.

Balancing Critical National Security Resources

To preclude conflicts between Ready Reserve members’ military mobilization

obligations and their civilian employment requirements during times of war or national

emergency, the Department conducts a continuous “screening” program to ensure the availability

of Ready Reservists for mobilization. Once a mobilization is declared—as occurred on

September 14, 2001 -- all screening activities cease and all Ready Reserve members are

considered immediately available for Active Duty service. At that time, no deferments, delays,

or exemptions from mobilization are granted because of civilian employment.

However, due to the unique situation that was created by the events of September 11,

2001, the Department immediately recognized that certain federal and non-federal civilian

employees were critically needed in their civilian occupations in response to the terrorist attacks

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on the World Trade Center and Pentagon. Accordingly, the Department established a special

exemption process to help accomplish overall national security efforts. As of December 31,

2003, we have processed 263 requests from civilian employers to delay or exempt a reservist-

employee from mobilization. We approved 98 requests for exemptions, 90 reservists were

authorized a delay in reporting to give the employer time to accommodate the pending

mobilization of the employee, and 75 requests were denied. We continue to receive exemption

requests as additional reservists are identified for mobilization and process them as expeditiously

as possible.

Employer Support of the Guard and Reserve

Employer support for employee participation in the National Guard and Reserve is

absolutely critical to recruiting and retaining quality men and women into our Reserve forces.

Building employer support requires a strong network comprised of both military and civilian-

employer leaders, capable of fostering communication, education and an exchange of

information. Employers’ understanding of their legal requirements concerning support for Guard

and Reserve employees is imperative.

The National Committee for Employer Support of the Guard and Reserve (ESGR) is the

Department’s primary office for outreach and education to employers. ESGR coordinates, trains,

funds and directs the efforts of a community based national network of over 4,200 volunteers,

organized into 55 committees located in every state, the District of Columbia, Guam, Puerto

Rico, the Virgin Islands and in Europe. ESGR has developed and implemented new training

programs for their volunteers, planned new industry symposia to bring together industry

segments with military and Department leaders, expanded their presence at industry conferences,

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and further developed and enhanced their partnerships with the National Chamber of Commerce,

state and local Chambers of Commerce, and local and national Human Resource organizations.

Although we established a Guard and Reserve Employer Database in late 2001 in which

reservists could voluntarily provide information about their civilian employers, we were having

limited success in populating the database. However, information about the civilian employers

of reservists is necessary for the Department to meet its statutory responsibilities to consider…

“civilian employment necessary to maintain national health, safety, or interest”(10 USC, Sec.

12302) … when determining members to be recalled, especially members with critical civilian

skills and to inform employers of reservists concerning their rights and responsibilities under the

Uniformed Services Employment and Reemployment Rights Act (USERRA).

Last year we began laying the groundwork for a mandatory reporting program. That

effort will culminate with the rollout of a new Civilian Employment Information (CEI) Program

this spring. Under the CEI program, reservists will be required to provide information about

their employers. We have been working closely with the Services and the Reserve components

in the development of this program to ensure we protect the privacy of reservists with respect to

the use of this information on their civilian employers. For example, we would not directly

contact an employer about an individual reservist unless the reservist asked for our assistance

with an employer issue. But we could work with an employer as part of our broader efforts to

inform all employers about the Guard and Reserve.

Populating the Guard and Reserve Employer Data Base is critical in order to clearly focus

employer outreach efforts. It will enable us to work closely with the civilian employers who are

directly affected by the mobilization of reservists. The use of this program will also assist in

other research projects we have undertaken to determine if and when significant problems with

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employers are emerging. Understanding the challenges civilian employers must address will

help us identifying steps we can take that will be most beneficial to them—strengthening our

employer support program and making service in the Guard and Reserve easier for our members.

The Value of the Reserve Components

The FY 2005 Defense budget recognizes the essential role of the Reserve components in

meeting the requirements of the National Military Strategy. It provides $31.3 billion for Reserve

component personnel, operations, maintenance, military construction, and procurement accounts,

which is approximately 1% above the FY 2003 appropriated level. This represents 8.3% of the

overall DoD budget, providing a great return on the nation’s investment. Included are funding

increases to support full-time and part-time personnel, and the required sustainment of

operations. It also continues last year’s effort toward Reserve Component equipment

modernization and interoperability in support of the Total Force policy.

These funds support nearly 862,900 Selected Reserve personnel requested in the

President’s Budget. The Selected Reserve consists of the following: Army National Guard

350,000; Army Reserve 205,000; Naval Reserve 86,000 , Marine Corps Reserve 39,600, Air

National Guard 106,700 , and Air Force Reserve 75,600 , Coast Guard Reserve 11,000 (funded

by DHS). Our total Ready Reserve, which also includes the Coast Guard Reserve, Individual

Ready Reserve and Inactive National Guard is 1,188,074 personnel.

Entitlements Growth

Military Compensation

Sound compensation practices are essential to attracting and retaining the caliber of

individuals needed for a robust All Volunteer Force. With the support of Congress, we have

made great progress over the last few years in improving our members’ basic pay. Since Fiscal

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Year 2000, basic pay has increased 29 percent. Particularly noteworthy, mid-grade

noncommissioned officers, who represent the core of experience and talent in our military

services, have seen their pay increase an average of 35 percent.

Likewise, we applaud the Congress’ continued support for reducing military members’

out-of-pocket housing costs, which stood at nearly 18 percent in Fiscal Year 2000. Through

Basic Allowance for Housing increases during each of the past few fiscal years, we will achieve

our goal of totally eliminating average out-of-pocket housing costs with this year’s President’s

budget.

To capitalize on our successes in recruiting and retention and sustain that momentum, we

must continue to invest in items that leverage readiness. Authorities for flexible compensation

tools enable the Department to tailor incentives to respond to specific readiness demands and

provide the capacity to efficiently start and stop them. For example, we are seeking an increase

in the ceiling for Hardship Duty Pay, which will furnish the Department with the ability to

compensate appropriately members who are repeatedly deployed away from their families and

placed in harm’s way in support of contingency operations. Additionally, increased use of the

recent Assignment Incentive Pay authority will provide a viable means of incentivizing hard-to-

fill duty stations, such as Korea and other remote locations, which directly impacts unit readiness

in a positive way.

Conversely, we discourage the expansion of entitlements and the creation of new ones

that do not leverage readiness. For example, TRICARE for non-active reservists and their

families could have a long-term fixed cost of $1 billion annually with little payoff in readiness.

The phase-in of concurrent receipt for retirees with at least a 50 percent disability and expansion

of the Combat-Related Special Compensation program, while not directly reflected in the

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Department’s budget, will cost $6.1 billion a year within 10 years ($4.1 billion from the DoD

retirement fund and $1.5 billion from VA entitlements) , funds that could potentially be applied

to areas that better address national security needs. The chart below illustrates the growth in the

cost of recent new entitlements since 2000, projected out to 2010.

11OUSD(P&R) / Military Personnel PolicyOUSD(P&R) / Military Personnel Policy

Entitlements GrowthEntitlements Growth

0

4

8

12

16

20

$ B

illio

ns

20012002

20032004

20052006

20072008

2009

Tri-Care for Life Accrual

Health Benefits for Reserves

Concurrent Receipt/CRSC/SCSD

FY 2004 Data

This year, we understand the Congress may be considering additional expansions of

entitlements programs, such as lowering the age Reserve retirees receive their annuity from 60 to

55. Preliminary, rough estimates indicate that this could cost $6.6 billion in payments, nearly $4

billion in added health care costs, and $14 billion in Treasury outlays over the next 10 years.

Yet, we have no evidence this would help shape the force or improve readiness; most Reservists

who would immediately benefit are already retired. Proposals to eliminate the reduction in

survivor benefits that takes place at age 62, from 55 percent to 35 percent of military retired pay,

when social security provides the difference, could cost $800 million the first year and exceed $1

billion per year within five years. A five-year phase-in has been scored by CBO to cost $7

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billion over 10 years. The phase-in of concurrent receipt, if expanded to full concurrent receipt,

would equal $8.4 billion a year within 10 years (almost 40 percent greater than the newly-passed

benefits).

More long-term entitlements are not the answer to our readiness issues. We need flexible

compensation and benefit authorities that can focus benefits to support members deployed to a

theater of hostilities, as well as their families, and can be terminated when no longer necessary.

We firmly believe authorities of the type that leverage readiness best serve the national defense.

Military Health System Funding

Defense Health Program (DHP) costs continue to rise, reflecting increased utilization by

beneficiaries returning to the MHS for their care. In 2003, the DHP experienced a seven percent

increase in new users; we anticipate that the growth rate in 2004 will also be seven percent.

These growth rates reflect healthcare increasing costs in the private sector and the consequent

election of MHS-eligible beneficiaries to return to TRICARE. Activation of Reserve

Component members brings additional eligible beneficiaries to the MHS.

The Department has initiated several management actions to use resources more

effectively and thus help to control the increasing costs of healthcare delivery. The MHS will

implement performance-based budgeting that focuses on value rather than cost of healthcare. An

integrated pharmacy benefits program including a uniform formulary based on relative clinical

and cost effectiveness is being established. Federal pricing of pharmaceuticals in the TRICARE

retail pharmacy program will be used to generate significant cost avoidance. Utilization

management programs continue to ensure that all provided care is clinically necessary and

appropriate.

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We need your assistance by restoring the flexibility to manage DHP resources across

budget activity groups. Our new healthcare contracts use best-practice principles to improve

beneficiary satisfaction and control private sector costs. Our civilian partners must manage their

enrollee healthcare and can control their costs by referring more care to our military treatment

facilities (MTFs), or our direct care system. In concert with the new contracts, we will

implement a Prospective Payment System to create the financial incentive for our MTFs to

increase productivity and reduce overall costs to the Department; funds will flow back and forth

from the MTFs to the private sector. Currently, MTFs’ revised financing funds are in the private

sector budget activity group. Fencing DHP funds not only prevents transfer of funds from MTFs

to the Private sector, but also prevents transfer of private sector funds to the MTFs. Fencing DHP

funds does not allow MTFs to use these revised financing funds to increase their productivity

and workload without prior approval reprogramming. We understand and appreciate that the

Congressional intent was to protect direct care funding; however, fencing the DHP funds will

adversely affect both the MTFs and care in the private sector. We urge you to allow the MTFs

and the Military Health System to manage the DHP as an integrated system. Funds must be

allowed to flow on a timely basis to where care is delivered. Reprogramming is a three to six

month process.

Reserve Health Benefits

In addition to the enhanced benefits the Department offered to activated Reserve Component

members and their families during 2003, the FY 2004 DoD Supplemental Appropriations Act

included even more new benefits. The new temporary reserve health program offers us the

ability to assess its benefits after the trial period is over. We will look to see if they adequately

enhanced access to care for our reserve component members and their families and improves our

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readiness as a fighting force. Assuring the medical readiness of reservists when they are called

to active duty registers as one of our highest priorities. Plus, providing excellent benefits to the

families of activated reservists and supporting them in the transition to and from active duty are

vitally important responsibilities. Looking to the future, we need to proceed cautiously in

considering costly new entitlements for reservists who have not been activated. A key issue

would be the effect of a new entitlement on recruitment and retention of both reserve and active

duty component members.

Improving Military Personnel Management

Recruiting

The success of our All-Volunteer Force starts with recruiting. During FY 2003, the military

Services recruited 178,350 first-term enlistees and an additional 6,528 individuals with previous

military service into their active duty components, for a total of 184,878 active duty recruits,

attaining over 100 percent of the DoD goal of 184,366 accessions.

The quality of new active duty recruits remained high in FY 2003. DoD-wide, 95 percent

of new active duty recruits were high school diploma graduates (against a goal of 90 percent) and

72 percent scored above average on the Armed Forces Qualification Test (versus a desired

minimum of 60 percent).

In the Reserve Components, during FY 2003, the Military Services recruited 259,290

first-term enlistees and an additional 84,312 individuals with previous military service for a total

of 343,602 recruits, attaining 104 percent of the DoD goal of 331,622 accessions. All Active and

Reserve Components, except the Army National Guard, achieved their accession goals

We are closely monitoring the effects of mobilization on recruiting and retention,

especially for the Reserve components. The Reserve endstrength objective for FY 2003 was

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achieved. Despite a recruiting shortfall, the Army National Guard did achieve its endstrength,

thanks to low attrition. The recruiting picture for the Army National Guard is much better

through the first quarter of FY 2004—achieving 102 percent of mission thus far.

We are optimistic that all Services will achieve their active duty recruiting goals this

fiscal year. All Services entered FY 2004 with a sizable delayed entry program, and all Services

are ahead of their year-to-date goals for active duty recruiting. Unlike the Active Component,

the Reserve Components do not routinely contract recruits for accession into a future period. So,

while the Active Components entered FY 2003 with healthy delayed entry programs, the Reserve

Components must recruit their entire goal in this current fiscal year.

The trend of an increasing percentage of Reserve Component recruits without prior

military service continues. Approximately 50 percent are now expected to come directly from

civilian life. This is a result of high Active Component retention contributing to lower Individual

Ready Reserve populations.

For 2004, all Reserve components are continuing to focus their efforts on maintaining

aggressive enlistment programs by using both enlistment and re-enlistment incentives in critical

skill areas. Emphasis will be placed on the prior service market for both officers and enlisted

personnel. The Reserve components will expand their efforts to contact personnel who are

planning to separate from the Active component long before their scheduled separation and

educate them on the opportunities available in the Guard and Reserve. In addition, the Reserve

components will increase their efforts to manage departures. All Reserve components are

achieving success in retention, with year-to-date attrition well below previous years.

The Services accessed 17,909 commissioned officers to active duty in FY 2003. The

Marine Corps met its numerical commissioning requirement, with the Army and Navy finishing

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the year within 1.5% of their requirement. The Air Force finished with a shortfall of 4%, almost

exclusively in medical specialty direct appointments. In FY 2004, active duty officer accessions

are on track in all Services for numerical success this year. In FY 2003, the Reserve components

reduced the shortfall of junior grade officers by adding an additional 1,455 officers to the force.

Retention

In FY 2003, retention was good. Services met virtually all of their retention goals. The

Marine Corps barely missed its goal for retaining first-term personnel and the Air Force fell

slightly short of its goal for retaining individuals in their second term of service. Despite

extended deployments, long separations, and dangers of combat, soldiers are staying with the

Army. This year’s FY outlook remains optimistic as evidenced by our 1st quarter achievements.

Active Duty

Enlisted Retention,

1QTR FY04

Reenlisted 1st QTR

Goal

% of Goal

FY04 Goal FY 05

Goal

Army

- Initial 6121 6,141 99.7% 23,000 19,949

- Mid Career 5046 5,276 95.6% 20,292 23,528

- Career 3411 3,330 102.4% 12,808 11,881

Navy

- Zone A 63.1% 56% Exceeded 56% Not

available

- Zone B 76.3% 70% Exceeded 70% Not

available

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- Zone C 88.5% 85% Exceeded 85% Not

available

Air Force

- 1st Term 67% 55% Exceeded 55% 55%

- 2nd Term 75.5% 75% Exceeded 75% 75%

- Career 97.5% 95% Exceeded 95% 95%

Marine Corps

- 1st term 4,351 3,813 114% 5,958 5,850

- Subsequent 2,299 1,407 164% 5,628 5,900

The Services are adequately resourced to meet their retention goals provided the tempo

and economic conditions remain at the same level as the last fiscal year. We will be monitoring

retention carefully should the tempo increase further, or if economic developments require us to

consider implementing additional incentives.

Joint Officer Management (JOM)

The mission requirements of the military are more focused on joint tasks; in fact, Joint

Task Forces now define the way in which we array our forces for war and that has filtered down

into our training methods. Military organizational structures have evolved to meet these new

joint warfighting requirements. The Department’s management processes for joint duty

assignments, education and training are governed by the 1986 Goldwater-Nichols Act.

Although we have experienced profound success, the operating environment we face has

changed since the early days of the Goldwater Nichols Act. In response, the Department is

refining our strategic plan for joint officer management, education and training, and is using the

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ongoing, Congressionally-mandated, Independent Study of Joint Management and Education to

help evaluate and validate how we best meet the challenges of the early 21st century.

We look forward to working with Congress in strengthening joint management and

training. As a modest start, we are proposing several administrative reforms to simplify and

streamline processes and program requirements: modifying the definition of a “tour of duty” to

count multiple consecutive joint tours as one continuous tour; modifying annual reporting

requirements by adding more meaningful metrics for measuring joint compliance; allowing the

accomplishment of Phase II Joint Professional Military Education (JPME) in less than 3 months;

and making permanent the joint promotions policy objective for the “other joint” category, which

includes Joint Staff Officers, to greater than or equal to the Service board average.

The Department is assessing the entire career continuum of officer education and

training, including joint requirements, with the goal of reducing the amount of in-residence time

required, maximizing viable advanced distributed learning (ADL) opportunities, and integrating

joint requirements. We want to train and develop our leaders like we fight—in a joint

environment, and we are moving quickly to match policy to today’s operational environment.

We seek the Congress’ assistance in making these changes in law that might be necessary to

support those common objectives.

Building a Foreign Language Capability

Lessons from current operations and the Global War on Terrorism have demonstrated

the need for increased language ability and accompanying area knowledge within our Armed

Forces, and an increased emphasis on languages reflective of the post Cold War threat.

We need to change the way foreign language expertise is valued, developed and

employed within the Department, and language needs to be viewed as a military readiness

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capability. For present and future operations, we need members of the Armed Forces who can

understand and communicate in languages other than English. This includes service members

with language ability more sophisticated than that routinely achieved through our current

language training and public and private education systems. We need a way to equip deploying

forces with a sufficient ability to communicate in the language of the land. We also need a plan

for surging capability beyond that of the military forces, when required. We need service

members and leaders who understand the complexities of languages and cultures in a global

society.

Much work needs to be done in this area, and we have engaged a number of studies to

inform our decisions. We have already initiated the development and employment of crash

courses for troops deploying to Iraq. The Army is executing a pilot Individual Ready Reserve

program that targets the enlistment of Arabic speakers for support as linguists.

With over 1,300 faculty and 3,800 students, the Defense Foreign Language Institute’s

Foreign Language Center (DLIFLC) is the world’s largest foreign language school – and our

primary source of language instruction. An oft-quoted statistic is that DLIFLC has more faculty

teaching DoD’s five highest enrollment languages than all U.S. students graduating in those

languages nationwide. It is an institution whose product – a language qualified graduate—is

critical to global U.S. military operations. Our first area of emphasis is to ensure that this school

house can support our language capability requirements.

Our FY 2005 goal is to ensure the center can meet critical requirements by teaching basic

language to troops prior to deployment, to improving training development, and to improving the

capability to produce linguists with an advanced degree of language competence.

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Rest and Recuperation Leave (R&R)

Over 46,000 Service members and DoD civilians have participated in the R&R Leave

Program in support of OIF and OEF. The R&R Leave Program is vital to maintaining combat

readiness when units are deployed and engaged in intense operations. Feedback from Service

members participating in the R&R Leave Program indicates it is a successful program offering

Service members a respite from hostile conditions, an opportunity to leave the AOR, release

stress, spend time with their family/friends and return reenergized. R&R Leave will continue to

be offered to military members and DoD Civilians deployed in CENTCOM AOR in support of

the Global War on Terror at the discretion of the theater commander.

Citizenship

The Department is working closely with the Department of Homeland Security’s

Citizenship and Immigration Service to expedite citizenship applications for immigrants who

serve honorably as members of our Armed Forces. Approximately 37,000 active duty and

reserve personnel are non-US citizens and approximately 7,000 of these personnel have applied

for US citizenship. The Citizenship and Immigration Service (CIS) established a special office

in their Nebraska Processing Center to expedite military member citizenship applications.

Section 329 of 8 USC provided an exception where the President can authorize immigrants

serving in the US Armed Forces during times of conflict to apply for citizenship after three years

of honorable service. Public Law 108-87 reduced this waiting period to one year. The average

time for processing expedited citizenship applications has been reduced from 9 months to

approximately 90 days. The Military Services are informing non-US citizen military members of

the opportunity for expedited citizenship through radio and television, press releases and periodic

messages through command, personnel, legal and public affairs channels. However, finalizing

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citizenship requirements for military members overseas has been problematic. We are working

with the Citizenship and Immigration Service to expand authority for conducting naturalization

interviews and swearing-in ceremonies overseas. In the meantime, the Department of Defense

authorizes emergency leave for Service members who need to complete citizenship processing,

and seeks to identify members with pending citizenship applications in order to ensure they are

processed and finalized before they deploy.

Training Transformation

Our ability to successfully defend our nation’s interests relies heavily upon a military

capable of adapting to rapidly changing situations, ill-defined threats, and a growing need to operate

across a broad spectrum of evolving and emerging missions, including joint urban operations, joint

information operations, stability and support operations, and asymmetric warfare. The Services

have been highly successful for many years by possessing a training superiority over all real and

potential adversaries. We intend to maintain that critical edge in the future by continuing to move

our training methods and capabilities beyond those of the Cold War, and to integrate them into a

single, focused capability.

Transformed training is a key enabler to transforming this fighting force — and the

Training Transformation (T2) Initiative is vital to the Department’s transformation efforts. I am

pleased to report that since my last testimony to you, the Department, with your assistance, has

made significant progress in transforming DoD training to improve joint operations. We have

developed and implemented three supporting joint capabilities. Collectively, these capabilities,

when mature, will provide a robust, networked, live, virtual and constructive training and

mission rehearsal environment that enables DoD to build unparalleled military capabilities that

are knowledge-superior and adaptable. First, the Joint Knowledge Development and

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Distribution Capability (JKDDC) is working to prepare individuals by developing and

distributing joint knowledge via a dynamic, global-knowledge network that provides immediate

access to joint education and training resources. Second, the Joint National Training Capability

(JNTC) is preparing forces by providing command staffs and units with an integrated live,

virtual, and constructive training environment with joint global training and mission rehearsal in

support of specific operational needs. This January, we completed our initial JNTC Event at the

Western Range Complex. It has been deemed a very successful first step with great leadership

and support from the Services and Joint Forces Command. Three additional Events will be

conducted through the remainder of FY 2004. Lastly, the Joint Assessment and Enabling

Capability will develop and three levels of strategic performance assessment to determine: the

training value provided by JNTC and JKDDC with regard to Combatant Commander needs; how

well training transformation is integrated with Defense wide policies, procedures, and

information systems; and to what degree are the outcomes of training transformation aligned

with the Department’s strategic transformation goals.

It is not easy to plan and execute complex joint combat operations when the Services

have not fully trained in accomplishing those tasks. Consequently, during the January JNTC

Event, our forces honed their warfighting skills in joint close air support and other challenging

joint tactical tasks that were used on the battlefields of Afghanistan and Iraq. Admiral Edmund

G. Giambastiani, Commander, U.S. Joint Forces Command, said it best when he reflected on the

importance of JNTC - “What the joint community has been able to do with the JNTC is begin the

second wave of training transformation-where we can now link the service training ranges with

forces around the country-and in time, around the world-to a common joint environment at the

operational level. In a sense, this new training transformation is producing ‘Born Joint Training’

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that seamlessly brings together a combination of live, virtual and constructive capabilities to

create a common joint training environment. An important aspect of the JNTC is that it also

avoids any additive requirements to Service training....”

We are committed to meeting joint mission requirements of our Regional Combatant

Commanders and must ensure that Headquarters and Component staffs deploying to a combatant

command are fully trained to joint standards and in the concepts of network-centric warfare prior

to their deployment. Our focus is to prepare for joint operations so that we never conduct an

operation for the first time in combat.

Range Sustainment

Continued and assured access to high-quality test and training ranges plays a critically

important role in sustaining force readiness levels. The Department of Defense has increasingly

come to recognize that encroachment issues may limit the military’s ability to train as they

expect to fight. Urban sprawl, loss of frequency spectrum, restrictions on air space, and

endangered species - related restrictions on training lands may cause some restrictions on

training. Such constraints force the Services to alter or compromise training regimens. Over the

past several years, we have discussed these problems with Congress, and we appreciate your

concern and assistance in achieving meaningful solutions. We will continue to work closely

with you as we grapple with how best to sustain our training capabilities at the same time we

seek to transform our armed forces.

The DoD Range Sustainment Initiative is pursuing a comprehensive solution to

encroachment pressures on test and training ranges. The initiative addresses policy, organization

and leadership, programming, outreach, and legislative clarification. In addition, the Department

has initiated a significant compatible land use and buffer zone planning effort intended to

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mitigate further range encroachment based on authorities provided to the Department in the

FY 2003 Defense Authorization Act.

Sexual Assault

Sexual assault will not be tolerated in the Department of Defense – that message is clear

throughout the chain of command. It is a crime that is punishable under the Uniform Code of

Military Justice. Commanders at every level have a duty to take appropriate steps to prevent it,

to protect victims, and hold those who commit such offenses accountable.

Each of the Services has sexual assault policies for the health care support of victims.

This support is available to service members both in the United States, at overseas duty stations,

and in the current deployment theater.

Last summer the Fowler Panel, an independent panel, investigated allegations of sexual

misconduct at the Air Force Academy. Their report made recommendations with a single

priority in mind: the safety and well-being of the women at the Air Force Academy. Air Force

senior leaders are implementing those recommendations now. In addition, the Defense Task

Force on Sexual Harassment and Military Service Academies will assess and make

recommendations, including any recommended changes in law, relating to sexual harassment

and violence at the United States Military and Naval Academies.

However, prevention through education, review and reinforcement of what constitutes

sexual assault and related crimes, and their consequences is key. Development and sustainment

of working environments that instill trust among all members must begin at the lowest level of

leadership and continue to the top of the Department. My Deputy Assistant Secretary of Defense

for Force Health Protection and Readiness, Ms. Ellen Embrey, now leads a Secretary of Defense

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appointed task force to ensure proper command climate and infrastructure support is in place to

safeguard the victims of sexual assault.

Domestic Violence/Victims Advocacy

As with sexual assault, domestic violence will not be tolerated in the Department of

Defense. It is an offense against our institutional values and commanders at every level have a

duty to take appropriate steps to prevent it, protect victims, and hold those who commit them

accountable.

The Department continues to make significant progress in addressing the issue of

domestic violence within military families. We remain committed to implementing the

recommendations made by the Defense Task Force on Domestic Violence and have made major

strides toward that goal. Our efforts encompass a range of activities including legislative and

policy change, training for key players in our efforts to prevent and effectively respond to

domestic violence, and collaboration with civilian organizations.

We worked closely with Congress last spring and summer to create or change legislation

pertaining to transitional compensation for victims of abuse, shipment of household goods for

abused family members, and a fatality review in each fatality known or suspected to have

resulted from domestic violence or child abuse. These changes are reflected in the FY 2004

NDAA.

The Department has partnered with the Office on Violence Against Women of the

Department of Justice for several joint initiatives that include training for law enforcement

personnel, victim advocates, chaplains, and fatality review team members. As a part of our

collaboration with the Department of Justice, we are conducting demonstration projects in two

communities near large military installations. The goal of the projects is to develop a

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coordinated community response to domestic violence focusing on enhancing victim services

and developing special law enforcement and prosecution units. We know that military and

civilian collaboration is critical to an effective response to domestic violence since the majority

of military members and their families live off the installations.

The Department partnered with the Battered Women’s Justice Project and the National

Domestic Violence Hotline to conduct training for the Hotline staff to provide information about

the military to enhance Hotline staffs’ ability to assist military related victims who contact the

Hotline. We are also working with the Family Violence Prevention Fund to develop a

comprehensive domestic violence public awareness campaign that will be disseminated

throughout the Department of Defense.

We have initiated implementation of 45 of the nearly 200 Task Force recommendations,

focusing on recommendations pertaining to victim safety and advocacy, command education,

and training key players who prevent and respond to domestic violence such as law enforcement

personnel, health care personnel, victim advocates, and chaplains.

We are pleased with the progress we have made but realize there is more work to be

done. We are working to ensure that the policies we implement are viable across all Services

both in the continental United States and overseas, and minimize the possibility of unintended

consequences that compromise the safety of domestic violence victims and their children. We

collaborate closely with those who will be responsible for implementing the policies we write to

maximize their effectiveness across the Department.

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Improving DoD Healthcare management

The DoD – VA Partnership

We have successfully shared healthcare resources with the Department of Veterans

Affairs for twenty years, but many opportunities remain. In the past year, we introduced a

common national billing rate for our sharing agreements, greatly simplifying administrative

issues and paving the way for increased agreements at the local level.

In 2003, the President’s Task Force to Improve Health Care Delivery for our Nation’s

Veterans outlined a broad and substantive agenda to foster even greater collaboration in the

coming years. We have taken action on a number of the recommendations already. We initiated

a joint strategic planning process, began the process of electronically sharing medical

information, identified additional joint contracting opportunities, included the VA as network

providers in all of our TRICARE contracts, and other activities to promote access to quality,

affordable care for veterans and retirees. In the coming years, greater collaboration on our

capital planning and facility life-cycle management efforts will benefit all of our beneficiaries

and the American taxpayer.

TRICARE – The Military Health Plan

We have initiated a wholesale redesign of how we will organize, manage and motivate

our health delivery system in service to our beneficiaries. In August 2003 we awarded new

TRICARE contracts – one major piece of our TRICARE redesign.

Contracts. The first step in redesign of TRICARE was to simplify. We reduced the

number of TRICARE regions from eleven to three. We reduced the number of contracts from

seven to three; and the three TRICARE regions match the geographic span of the three

TRICARE contracts. With these new contracts, beneficiaries will realize easier access to care,

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better customer service and enhanced quality of care. The current and future contractors have

committed to smoothly transition every aspect of their responsibilities while maintaining the

highest standards of care and service. Throughout the transition, we have promised to keep

beneficiaries well informed.

We have “carved out” some major elements of the old TRICARE contracts into separate

and discrete contracts. These new contracts will leverage the expertise resident in companies

whose core competency is pharmacy management or claims processing or marketing. With this

carve out, we have established an integrated pharmacy benefits program that includes a uniform

formulary based on relative clinical and cost effectiveness. The national retail pharmacy contract

provides for use of federal pricing of pharmaceuticals and will allow better management while

improving beneficiary satisfaction by making it easier to obtain prescriptions while traveling.

Governance. The new organizational structure of TRICARE will transform and

streamline healthcare management to enhance efficiency, productivity and customer service in

support of our commitment to the best healthcare possible for all entrusted to our care. The

restructuring will strengthen the delivery system through partnering of our MHS personnel and

our purchased care contractors. TRICARE Regional Directors will integrate military treatment

facilities with civilian networks, ensure support to local commanders, and oversee performance

in the region.

We enlarged the role and responsibilities of medical commanders in their local health

care markets – the focus for accountability. Commanders will better manage services and

support to their patients—activities previously managed by the TRICARE contractor—including

patient appointing, utilization management, the use of civilian providers in military hospitals and

clinics (i.e., resource sharing providers), and other local services.

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The central management effort in TRICARE will be to establish and then manage toward

objectives set in annual business plans; plans developed locally and then built into Service and

Regional plans. The new Regional Directors have a key role in gaining participation of

providers in TRICARE and in implementing the plan to improve TRICARE Standard. This

health delivery option has served beneficiaries for over 35 years and we have underway efforts to

improve it for those who choose use it. Gaining beneficiary support and satisfying their

healthcare needs serve as the objectives for which the TRICARE contracts and organization are

designed.

Force Health Protection

The Department of Defense Force Health Protection program is comprised of a broad

constellation of activities designed to preserve and protect the health and fitness of our service

members from entrance into the military until separation or retirement. Preventive measures,

environmental surveillance, and advances in military medicine have supported our worldwide

operations with remarkable results. Despite deployments to some of the most austere

environments in the world, we have seen the lowest rates of non-battle illnesses and injuries in

the history of warfare. This is the result of increased focus, resources, line commitment and

service member education.

Health assessments. We ensure a healthy force through high medical standards at the

time of accession, periodic medical and dental examinations, routine and special-purpose

immunizations, and ready access to high quality healthcare. Learning from the Gulf War, prior

to and following deployment, service members now receive health assessments to ensure they

are fit for deployment and to identify any health issues once they return from deployment.

Deployment health records are maintained in the individual’s permanent health record and an

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electronic copy of the post-deployment health assessment is archived for easy retrieval and

research. We have begun an aggressive quality assurance program to monitor the conduct of

these assessments.

Immunization programs. Protecting our forces involves countering potential health

threats. Among the numerous preventive health measures in place for our service members

today, we have vital immunization programs. These programs offer protection from diseases

endemic to certain areas of the world and from diseases used as weapons, specifically anthrax

and smallpox. These vaccines are highly effective and we have based our programs on sound

scientific information that independent experts have verified. They are essential to keep our

service members healthy.

Medical Technology on the Battlefield. Last year we introduced elements of the Theater

Medical Information Program (TMIP) and Joint Medical Work Station to Operation Iraqi

Freedom. These capabilities provide a means for medical units to electronically capture and

disseminate near real-time information to commanders. Information provided includes in-theater

medical data, environmental hazards, detected exposures and critical logistics data such as blood

supply, beds and equipment availability. New medical devices introduced to OIF provided field

medics with blood-clotting capability while light, modular diagnostic equipment improved the

mobility of our medical forces, and protective gear served to prevent injuries and save lives.

Medical hold. One consequence of the pre and post-deployment health assessments is the

identification of more service members as medically unqualified for deployment and even for

military service. This has generated additional Medical Evaluation Board processing than

previously experienced; it has contributed to the large numbers of service members awaiting

healthcare and specialty consultations. Another contributing factor to the “medical hold” issue is

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the number of Reserve Component personnel activated who are determined to be medically

unqualified for deployment. The Army has taken a series of actions to alleviate the problem, and

has significantly reduced the numbers of individuals in this category. We are committed to

deploying healthy and fit service members and to providing consistent, careful post-deployment

health evaluations with appropriate, expeditious follow-up care when needed.

Individual medical readiness. Among the many performance measures tracked within

the Military Health System (MHS) is the readiness health status of individual members, both

active and reserve components. Determining individual fitness for deployment and for continued

service is an important determination. For the first time, the MHS will track individual dental

health, immunizations, required laboratory tests, deployment-limiting conditions, Service-

specific health assessments and availability of required individual medical equipment. This

tracking should assist in alleviating the Reserve Component medical holdover issues in the

future.

Transition to VA. After service members return from deployments, healthcare is

available through military and VA providers. While our collaborative efforts with the

Department of Veterans Affairs span the entire military health system, there is no greater

imperative than to ensure we successfully manage the transition of service members from active

to veteran status. A significant advance was made with the establishment of the Federal Health

Information Exchange, allowing for the electronic transfer of essential medical information.

Improved communication and education for service members as well as enhanced case

management for patients have improved the transition to veteran status.

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Readiness Assessment and Reporting

We are dramatically improving the way we measure the readiness of our military units

and support structure-finally answering the elusive “ready for what” question. Our new Defense

Readiness Reporting System (DRRS) provides a near real time assessment of military

capabilities, and uses this information to improve the way we plan and manage our forces. Our

partnerships with United States Pacific Command (PACOM) and the Navy have produced

working, scalable versions of measurement and assessment tools over the past year. PACOM

designed the Joint Military Assessment Tool to allow organizations from the Combatant

Commander-level down to tactical units to assess their ability to perform assigned missions.

Navy’s DRRS-Navy expanded PACOM’s effort by including nearly all operational naval units

and creating the ability to view related, output-focused metrics. Over the course of the year, we

will continue expanding our scope to include key Army units and introduce initial scenario

assessment tools into the DRRS suite. We expect to have an initial operational capability for

DRRS by September (2004), with a phased implementation throughout DoD over the next three

years (2007).

Recruiting and Retention of Civilians

I want to take this occasion to again thank the committee and the Congress for enacting the

National Security Personnel System (NSPS) in the FY 2004 NDAA. In developing NSPS, our

pledge to you and our workforce is this: our civilian employees deserve a flexible personnel

management system, and we will make sure it’s fair.

The purpose of NSPS is to strengthen the ability of commanders and employees to meet their

mission requirements in an ever-changing national security environment. A commander has

three personnel cadres with which to perform the mission: military, civilian, and contract. The

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opportunity for the civilian employee and commander to respond rapidly to changing

requirements is seriously compromised by a rigid and fragmented system of civilian personnel

management. Additionally, motivation is key to employees performing well on the job and we

must change the recognition system to respond to employee concerns that good work is not

recognized as it should be. A rigid, slow system of personnel management does not motivate our

employees to do their best. Installation commanders have to meet a number of mission

objectives and these objectives are constantly changing. NSPS will allow us to develop a more

rational personnel management system, provide employees new opportunities, and give

commanders and managers more flexibility to accomplish the mission.

In a government-wide survey, DoD employees made it clear that the current personnel

system is not working even though they like their work, believe they do it well, and have a good

work-life balance. However, only 47 percent said they are satisfied with the recognition they

receive for doing a good job, only 40 percent said that creativity and innovation are rewarded,

only 32 percent said that the awards programs provide an incentive to do their best, only 31

percent said they are satisfied with the opportunity to get a better job in the organization, and

only 26 percent said that steps are taken to deal with poor performers. We can and should do

better than that; NSPS gives us that opportunity.

How are we doing in implementing NSPS? We begin with the following tenets:

• We recognize that a new system that is both fair and perceived to be fair is essential to

the accomplishment of our mission.

• We recognize that serious collaboration with stakeholders and continuous communication

with employees is critical to making the new system work.

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• We recognize, as the law prescribes, that NSPS must preserve basic employee

protections, including merit principles, veterans’ preference, anti-discrimination rules,

due process, prohibited personnel practices, and the right to join unions and bargain.

We are committed to implementing NSPS fairly and responsibly. We have established a

cross-Component program management office to guide implementation. In January, we met

with union representatives to begin the development of a new system of labor-management

relations. In February, we provided the unions, upon their request, a concept paper to begin the

dialogue and collaborative process. Last week, we met with the unions to discuss these concepts

and afford the unions an opportunity to provide their concepts. We are close to identifying those

organizations that will initially participate in NSPS. By the end of this calendar year, we plan to

begin implementing NSPS within the Department following an intensive training program for

supervisors, managers, human resources specialists, employees, as well as commanders and

senior management.

Taking Care of Families

Military families are a top priority for the Department, especially those impacted by

deployment. The Department is sensitive to the hardships and challenges faced by military

families when the Service member is away from home for a long period. Service members

perform tough duty in austere locations, while their families deal with the stress and anxiety

associated with extended separations. Current deployments necessitate robust support. The

military family is an integral component of the military community and an essential ingredient in

military strategy and planning.

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America wants to support its troops and families. Service members and families have

been almost overwhelmed with the outpouring of support. Donations, such as frequent flier

miles to help with family reunions, special televised tributes, celebrity entertainment, and

corporate contributions from firms like Home Depot are but a few of the ways America has

shown support for its troops. This support has been key to their continuing good morale.

Each of the Services has built a highly responsive family support system that incorporates

the best resources available to help families cope with the demands of military life. Reserve

families who live across America present a particular challenge. An aggressive effort to reach

Reserve families is under way.

Since October 2002, a joint family readiness working group has been meeting to share

strategies, identify gaps in service and review lessons learned. This group has promoted the

sharing of best practices and pushed to increase mutual support across Service and component

boundaries. Consequently, we have seen an increase of shared support and practices carry down

to the lower unit level. The working group approach has worked well in facilitating family

readiness and creating a mutually supportive network focused on the total force.

Joint collaboration has contributed to widespread increases in support to vital family

readiness and support programs to help support Guard and reserve families, including the

establishment of approximately 400 National Guard family Assistance centers to augment the

family support system and Reserve and Guard component inclusion in the popular Military

OneSource program, which provides 24/7 individual and family support. The National Guard

has taken the lead for supporting families that are geographically isolated from military

installations, working through 54 state and territory offices to provide family support and

training. Unit Family Readiness Groups, staffed by volunteers, actively maintain communication

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with families in outlying areas through newsletters, websites, and direct communication to

enhance unit-to-family communication.

Family Assistance Centers

Family assistance centers have increased operations to unprecedented levels to meet

family needs. These centers serve as the primary delivery system for military family support

programs, including deployment support, return and reunion, and repatriation for active duty,

Guard and Reserve members and their families. Family support programs assist unit

commanders, Service members and families affected by deployment and mobilization and

directly contribute to mission readiness.

Specifically for reserve families, there has been a tremendous improvement in reserve

family access to resources since the 1991 Gulf War. Today, families have multiple sources that

may support them while their Service member is deployed, and the Services continue to improve

programs and expand outreach in order to make access to support systems even better. Thanks to

the National Guard Bureau, over 400 family assistance centers have been brought online to meet

the unique needs of our families. These joint centers provide an outreach capability not only to

Guard and Reserve families that are not located near an installation, but they also support the

large number of active service and family members who reside off the installation. Civilian

community support services available to families range from help with household repairs to

financial planning, childcare, legal services, family counseling, and free or discounted services.

The Department has also partnered with USA Freedom Corps to facilitate volunteer efforts to aid

and assist military families through the Freedom Corps website and volunteer network. Other

partnerships have been established with public schools to develop support programs and teacher

training materials to meet the unique needs of our military children.

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We published a “Guide to Reserve Family Member Benefits,” which is designed to

inform family members about military benefits and entitlements, including medical and dental

care, commissary and exchange privileges, military pay and allowances, and reemployment

rights of the service member. The benefits guide is also available on the DefenseLink web site.

We developed a family readiness “tool kit” that contains a wealth of information to assist

commanders, service members, family members and family program managers with information

to help reserve families, and Guard and Reserve members, prepare for mobilization and

deployments.

Military One Source

“Military OneSource” provides a customized approach to individual information and

referral services for military families. It is available 24 hours a day, 7 days a week, 365 days of

the year, from any place, any time, tailoring services specifically to individuals and individual

families. “Military OneSource” is an augmentation, not a replacement, for the family centers

that are cherished, and it brings services to all members of the Armed Forces. This includes

Reserve and National Guard members and families who do not live on military installations, and

often can’t take advantage of what DoD has to offer. This service provides all of our Service

members and families with immediate information concerning support available on the

installation or in their community. We have budgeted $20M in 2005 to sustain “Military

OneSource.” The toll-free telephone, e-mail and web site, all include information and referrals

on parenting and child care, education, deployment and reunion, military life, health, financial,

relocation, everyday issues (i.e. pet care, plumber), work and career, to name a few. Each of the

Military Services will have fully implemented the service by the end of FY 2004. Marine Corps

was first to stand-up the program and is enjoying positive feedback and results.

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Additionally, we are building upon this outreach by implementing a program of prepaid

face-to-face counseling for a specified number of sessions. Families who contact the toll-free

number but need face-to-face assistance can schedule counseling from a licensed counselor

within their immediate geographic area in CONUS. This is particularly important for remote

families of mobilized Guard and Reserve units who may also have a deployed Service member

and may live a great distance from the programs provided on installations.

Child and Youth Development Programs

Military child development continues to be important to families and remains a top

priority for the Department. During Operations Enduring Freedom and Iraqi Freedom, child care

presented a major challenge for the families of deployed troops. To support families during

deployment, $8 million of emergency supplemental funding was used in 2003 to provide over

412 thousand hours of additional child care programs to meet specific mission requirements.

Installations provided child care for extended hours on nights and weekends; added drop-in,

respite, and mildly ill care; and extended services to the Guard and Reserve. For 2004, $13.5

million of emergency supplemental funding is designated to continue these vital efforts and to

explore new ways to expand child care availability in the civilian community.

In 2003, the Department invested approximately $400 million to provide over 174,000

child care spaces and is making progress to expand the number of available spaces (in 2003,

almost 2,000 spaces, primarily through growth in the family child care program). RAND is in

the process of reviewing the child care need formula. The Department has initiated a Business

Initiative Council (BIC) effort that will focus on increasing child care spaces in civilian

communities through subsidies and partnerships. It is anticipated that sustaining on-base

programs while maximizing resources in the civilian community will close the child care gap

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more quickly than an approach based primarily on construction. The Department’s budget of

over $400 million in FY 2004 and FY 2005 reflects a continued commitment to provide child

care for military families.

Because deployment of a family member can adversely affect a child’s behavior both

academically and socially, the Department of Defense has developed several avenues to support

children of military families, their parents and the teachers that educate military children. Skilled

educators, counselors and mental health workers associated with the public schools attended by

military children generally are often unaware of the lifestyle, issues and challenges of the

military child. With a focus on the children of deployed personnel, the Department reached out

to public school districts to alert them to and engage them in addressing the unique needs

children from families in which at least one parent was deployed. Efforts included the

development of booklets, posted on a new website, for use by educators and parents. Also

posted on the Internet were best practices used by exemplary schools.

DoD has worked with renowned experts, such as Ms. Marleen Wong, a national expert

on terrorism, trauma and children, regarding publications, website information and program

development for students of deployed families, their parents and teachers. Ms. Wong’s

contributions to the DoD Educator’s Guide to the Military Child During Deployment; Educator’s

Guide to the Military Child During Post-Deployment: Challenges of Family Reunion and

Readjustment; and Parent’s Guide to the Military Child During Deployment and Reunion have

provided support through information for our military families and educators. Dr. Robin

Goodman, a director and psychiatrist at the Child Study Center, New York University School of

Medicine, has also contributed her book, Caring for Kids After Trauma and Death: A Guide for

Parents and Professions for the benefit of all who serve our children. All publications are on a

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special website designed to meet the needs of children of deployed parents,

www.MilitaryStudent.org.

Department of Defense Education Activity

The Department of Defense Education Activity (DoDEA) has been an active partner in

supporting students and families during the war. All schools within DoDEA have Crisis

Management Teams to assist students and teachers during stressful times. Working in

collaboration with military and civilian communities, they provide support before, during and

after each deployment.

The Department has a school system to be proud of, and we continue to address quality

issues in the areas of curriculum, staffing, facilites, safety, security and technology. Our

dependent schools comprise two educational systems providing quality pre-kindergarten through

12th grade programs: the DoD Domestic Dependent Elementary and Secondary Schools

(DDESS) for dependents in locations within the United States and its territories, possessions, and

commonwealths, and the DoD Dependents Schools (DoDDS) for dependents residing overseas.

Today, approximately 8,800 teachers and other instructional personnel serve more than 101,000

students in 223 schools. They are located in 13 foreign countries, seven states, Guam, and

Puerto Rico. Students include both military and civilian federal employee dependents.

The quality of DoD schools is measured in many ways, but most importantly, as in other

school systems, by student performance. DoD students regularly score substantially above the

national average in every subject area at every grade level on a nationally standardized test.

In addition, students participate in the National Assessment of Educational Progress

(NAEP) tests. NAEP is known as “the Nation’s Report Card” because it is the only instrument

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that permits a direct comparison of student performance between states and jurisdictions across

the country. DoDEA students, and in particular its African-American and Hispanic students,

score exceptionally well on this test, often achieving a first or second place national rank when

compared with their peers.

DoDEA’s 2003 graduates were awarded nearly $33.5 million in scholarship and grant

monies for further education. Graduates in 2003 reported plans to attend over 800 different

colleges and universities worldwide.

To meet the challenge of the increasing competition for teachers, DoD has an aggressive

U.S. recruitment program. The program emphasizes diversity and quality, and focuses on

placing eligible military family members as teachers in its schools.

Morale, Welfare, and Recreation Initiatives

The Services have implemented a broad assortment of Morale, Welfare and Recreation

(MWR) program initiatives aimed specifically for forces deployed to fight the war on global

terrorism and their family members. These include free, MWR operated, internet cafes at 30

locations in Iraq, computers and internet service at home station libraries and youth centers to

ensure families can send and receive e-mails from their loved ones who are deployed.

Additionally, there has been library book and periodical kits, recreation kits that include large

screen televisions, DVD/CD players, movies, up-to-date video games and game CDs, exercise

equipment, sports equipment, pool and ping pong tables, movie projectors and first run movies.

Auto skills centers have also set up special programs to assist spouses of deployed personnel

with emergency auto repairs.

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Armed Forces Entertainment

Armed Forces Entertainment, in cooperation with the United Services Organization

(USO), continues to provide much welcomed celebrity and professional entertainment to our

forces engaged in the war on global terrorism. Robin Williams, Robert De Niro, Conan O’Brian,

David Letterman, Drew Carey, Arnold Schwarzenegger, Gary Senise, Paul Rodriquez, George

Gervin, Kid Rock, Lee Ann Womack, Miss Universe, several NASCAR and WWF stars, and

several NFL cheerleading squads are some of the many celebrities and entertainers who have

generously donated their time to bring a taste of home to deployed forces.

Field Exchanges

There are 52 Tactical Field Exchanges, 69 exchange supported/unit run field exchanges,

and 15 ships’ stores in the OIF/OEF theaters providing quality goods at a savings, and quality

services necessary for day-to day living. Goods and services offered include phone call centers,

satellite phones, internet cafes, video films, laundry and tailoring, photo development, health and

beauty products, barber and beauty shops, vending and amusement machines, food and

beverages, and name brand fast food operations. Goods and services vary by location based on

troop strength and unit mission requirements.

Telecommunications

It is a longstanding DoD practice for Service members to be able to make subsidized or

free telephone calls home. The frequency and duration of calls using official phones for Health,

Morale, and Welfare calls are determined by the commander so as not to interfere with the

mission.

The FY 2004 NDAA requires that prepaid phone cards, or an equivalent

telecommunications benefit, be provided without cost to enable Service members serving in

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Operation Enduring Freedom and Operation Iraqi Freedom to make telephone calls. The

telecommunications benefit may not exceed $40 or 120 calling minutes. The Secretary of

Defense may accept gifts and donations in order to defray the costs of the program. The program

continues through September 30, 2004.

On the average, 50,000 Health, Morale, and Welfare calls are made each day. As we

implement the Act, we are identifying the value of the subsidized Health, Morale, and Welfare

calls and continuing efforts with our telecommunications partners to reduce the cost of calls from

the theater. We have mounted an information campaign to insure that members choose the most

economic calling method available and are looking at more convenient ways for the American

public to purchase and donate the best value of calling minutes to service members.

Financial Stability

The financial stability of military families is another initiative that the Department is

addressing, particularly in light of large troop deployments and mobilization. To help families

achieve financial stability, the Department has embarked on an initiative that combines educating

Service members and their families on using their finances wisely with expanding employment

opportunities for military spouses.

The Department has emphasized financial well being through a Financial Readiness

Campaign designed to enhance the education and awareness programs of the Military Services

through the support of 26 Federal agencies and non-profit organizations. We have already begun

to see positive changes in the self-reported assessment of financial condition of Service

members. The Department sees that this campaign will evolve into new practices to support

Service members and their families. The lessons learned through this campaign will be shared

with the National Commission for Financial Literacy and Education, established by Title V of

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the Fair and Accurate Credit Transaction Act of 2003 and assist the Commission in developing a

financial literacy strategy for the nation.

We are employing a similar collaborative approach to improve employment opportunities

of military spouses by partnering with federal, state and local governments to address legislative

and regulatory barriers that may inhibit financial stability and portability of jobs, and developing

partnerships with government, non profit and private sector organizations to increase the number

of opportunities available to spouse to develop careers. Through these initiatives the Department

seeks to enhance financial stability by promoting consistent reliable sources of income and the

ability to use it wisely to support quality of life needs and for attaining future life goals.

Commissaries

I’d like to thank the Congress for enacting legislation to provide unlimited commissary

benefits for Reserve and Guard members. The Department implemented the new authority the

same day the President signed it into law. You recognize, as do we, that the commissary benefit

is an important and valued component of non-pay military compensation and it is vital to the

quality of life of our Service members.

We are working to provide the commissary benefit in the most efficient and cost-

effective manner to be able to guarantee that each dollar from the American taxpayer is well

spent to support the quality of life of our military members and their families. To do so means

new stores may open where warranted, existing stores expand hours and stock assortment, while

commissaries that are no longer justified by their customer bases may close or be scaled back.

We believe that lowering the taxpayer subsidy while sustaining and improving the benefit

are mutually compatible. Through comparison to commercial industry best practices and

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performance indicators, we believe we can deliver the benefit in the most efficient and effective

manner possible.

We have asked the Defense Commissary Agency to conduct a study to determine the

feasibility of adopting variable pricing while sustaining an average 30 percent savings on all

products. Industry research and best practice suggest that we could more consistently deliver the

desired 30 percent savings to more commissary customers by using this approach.

Casualty Assistance

The Department continues to explore new methods and procedures to support our family

members better during the most tragic of times, the loss of their loved one in the active service to

our Nation. One such initiative is the expedited claims process (ECP) with the Social Security

Administration. During March 2003, we partnered with the Social Security Administration to

study the possibility of institutionalizing the ECP that was so effective in the tragic aftermath of

September 11, 2001. The ECP incorporates post-adjudicative development of evidence, as well

as the use of a special toll free number for applicants and casualty assistance officers to call

when they are ready to file. This process has been extremely successful in providing swift

financial assistance to our families. The final results of the pilot program showed the average

claims processing time dropped from several weeks to an average of just over two days time.

Accordingly, the ECP was made permanent in January 2004 for surviving family members of all

active duty casualties. We established a similar arrangement with the Department of Veterans

Affairs several years ago. That program, has also significantly expedited the delivery of

compensation and benefits to our families who have suffered the greatest loss.

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Conclusion

Mr. Chairman, this concludes my statement. I thank you and the members of this

Subcommittee for your outstanding and continuing support for the men and women of the

Department of Defense. Our objective is to ensure that our Armed Forces remain the best

trained, best-equipped fighting force in the world – and that we treat the volunteers who make

up the force with respect commensurate with their service, their sacrifice, and their dedication.